Ford Motor Company’s (F) first-quarter 2025 results underscored a turbulent operating environment, marked by planned production downtime, inventory rebalancing efforts, and rising tariff-related uncertainties that prompted the suspension of full-year guidance. Revenue fell 5% year-over-year to $40.7 billion, while net income declined to $471 million from $1.3 billion in Q1 2024. Adjusted EBIT dropped sharply to $1.0 billion, down from $2.8 billion, though operating cash flow surged to $3.7 billion, reflecting strong contributions from Ford Credit and favorable working capital shifts. In contrast, adjusted free cash flow saw a use of $1.5 billion, pressured by lower core operating earnings.

Segment performance revealed uneven trends. Ford Blue posted a modest EBIT of $96 million as volume declines and foreign exchange pressures offset pricing gains in North America. Yet, consumer interest remained strong, with Bronco sales up 35% and a rising hybrid mix. Model e narrowed its loss to $849 million, buoyed by improved pricing, cost actions, and a doubling of wholesale volumes, especially in Europe. Meanwhile, Ford Pro remained the company’s earnings engine, delivering $1.3 billion in EBIT despite a 14% drop in wholesales due to downtime and fleet pricing normalization. Its software business was a bright spot, with paid subscriptions up 20% and telematics revenue per unit up 40%. Ford Credit also strengthened, with EBT rising to $580 million, driven by robust used vehicle values and a strong loan portfolio.

Ford exited the quarter with $27 billion in cash and $45 billion in total liquidity, supported by renewed credit lines and a disciplined capital strategy. However, the company now faces a projected $2.5 billion gross EBIT impact from tariffs in 2025, with mitigation efforts expected to offset $1 billion, leaving a net adverse effect of $1.5 billion. This uncertainty has led Ford to suspend guidance for adjusted EBIT, free cash flow, and segment performance, with updates expected in Q2 as policy clarity improves.

CEO Jim Farley emphasized the company’s U.S. manufacturing footprint as a strategic advantage, assembling over 300,000 more vehicles domestically than its closest competitor last year. CFO Sherry House added that Q1 results exceeded expectations due to cost savings and North American pricing strength. Management reiterated a $1 billion cost reduction target for 2025 (excluding tariff impacts) and highlighted ongoing efforts to optimize supply chains and product margins.

Despite short-term volatility, Ford continues to invest in high-potential areas like software, commercial vehicles, and EVs. Notable launches such as the all-electric Puma in Europe and strong EV demand helped Model e achieve its best quarterly performance to date. With a strong balance sheet and flexible operating strategy, Ford appears positioned to navigate near-term challenges while advancing long-term priorities.